Episode description

Greetings, faithful Volts readers! Welcome back to the Transmission Week that never ends.

The news these last few days has been filled with talk about electricity grids. Texas is suffering from an unprecedented cold snap that has left more than four million people without power for days. It’s a terrible situation. There’s a lot to say about it, what can and can’t be learned, and perhaps I’ll get to it next week.

But you didn’t sign up for a breaking-news email, you signed up for Volts! So today brings what I believe what I believe will be my last big transmission post, though I may do a wrap-up after this. Thank you for traveling with me on this longer-than-expected journey.

Today, we’re going to look at a couple of final ideas to make the transmission grid work better, short of building new lines — a remainder bin of grid-enhancing technologies, if you will.

Idea #1: Using energy storage as a transmission asset

At least since the Energy Policy Act of 2005, the US government has acknowledged that energy storage technologies can be used to ease grid congestion and increase the reliability and flexibility of energy transmission. In recent years, there has been increasing interest in “storage as a transmission asset” (SATA), which refers to energy storage installations that are treated as transmission assets — meaning utilities can “rate base” them and receive a guaranteed rate of return plus any tariffs or incentives for transmission assets.

Basically, it means allowing some storage to be treated — legally, financially, and operationally — like a piece of the transmission system.

SATA projects — sometimes known as “virtual power lines” — offer a range of benefits to regional energy grids.

When a line is congested, it can offload some power to storage. At times of lower congestion, stored power can be injected to maintain high line utilization. Storage can thus relieve congestion and make the grid more reliable. It is much cheaper and quicker to deploy than new transmission, its footprint is much smaller, and it faces a much less onerous regulatory process. It is extremely modular and scalable, which means it can start small and be scaled up precisely to need, and even relocated as grid needs change.

Congestion on a power line often causes “inefficient dispatch,” meaning grid operators must ask generators on one side of the line to curtail their output and generators on the other side of the line to ramp theirs up, even if that isn’t the most cost-effective option. Storage on either side of the line can help reduce inefficient dispatch.

Another key service storage can provide is to free up unused line capacity. A grid capacity standard called “N-1” holds that the grid must maintain safe operation if a “contingency event” takes out one of the lines. This means all lines must maintain some reserve capacity to absorb energy in the event of an N-1 situation.

But storage can serve that purpose — rapidly injecting energy into, or absorbing energy from, the grid in the case of a contingency event — even better than power lines. Adding SATA projects can free up some of that reserve line capacity to carry more power.

As with most things transmission, Europe is way ahead of the US on this. Most notably, Germany is developing 1,300 MW worth of SATA in a project known as Netzbooster (grid booster) to free up line capacity otherwise reserved for an N-1 contingency. (Germany has notorious congestion between the wind-heavy north and load centers in the south.)

The US has nothing at the GW scale like that, but a few RTOs are moving forward. In August 2020, FERC approved MISO’s proposal for the rules and processes by which it would integrate storage into its planning and project selection.

One twist: FERC has indicated that it is “permissible as a matter of policy” in the US for a storage project to be “dual use,” to serve as a transmission asset and receive fixed returns and simultaneously to participate in wholesale energy markets and receive market returns.

This move has drawn some criticism, since it seems to blur the canonical separation between energy market participants and the “wires companies” that are supposed to offer them non-discriminatory access to the grid. If a wires company owns a storage asset that is drawing market returns, it has every reason to give that asset privileged grid access.

FERC has said dual use is subject to the following four principles:

* must be cost-competitive with transmission,

* must avoid double recovery for providing the same service,

* cannot suppress market bids, and

* cannot jeopardize ISO/RTO independence.

It’s not entirely clear how dual use storage could, in practice, avoid bumping up against those principles. So far as I know, none of the big RTOs/ISOs has yet hashed out exactly how to make the dual-use thing work. (Here’s an issue paper in which California ISO wrestles with the problem.)

There are reasons to remain skeptical of SATA projects. Batteries are still relatively expensive compared to other types of assets. “Many areas of congestion are better served by a new power plant, fuel cell, or demand response asset than a big single-purpose battery,” says Cody Hill, who analyzes and deploys storage projects for LS Power.

The California ISO has been skeptical too. It reported in 2018: “Over the past several years, the ISO has studied 27 battery storage proposals and one pumped hydro storage proposal as potential transmission assets. To date only two proposals have resulted in storage projects moving forward, both in the most recent 2017-2018 Transmission Plan.”

But utilities are allowed to rate-base SATA projects — receive a guaranteed rate of return on them — and they love rate-basing stuff, whether it’s cost-effective or not. They make money by spending money. (See: Texas utility Oncor’s $5.2 billion SATA proposal, which was never approved. I wonder if grid regulators regret that in light of current news!)

“A company that gets a SATA project approved gets a guaranteed profit on every dollar spent,” says Hill, “so utilities have an obvious incentive to get lots of these projects approved and put into the rate base, and not much of an incentive to keep the costs down.”

Hill warns that utilities are working in regulatory proceedings “to guarantee that they will have a monopoly on new SATA projects going forward” — sheltering them from competition under FERC Order 1000, the same way they’ve been sheltering transmission lines from competition (see this post for more on that). “Now that storage is getting cheap enough to pencil in more locations,” Hill says, “this would be a terrible outcome for storage developers and utility customers alike.”

Hopefully FERC will take steps to implement performance-based incentives for utilities and force true competitive bidding in both transmission and SATA, allowing merchant projects to compete on a level playing field. Here’s what the International Renewable Energy Agency (IRENA) says is needed (quoting its report):

* Clear rules on the ownership and operation of the Virtual Power Line (VPL).

* Compensation structures that reflect the costs of the VPL.

* Regulations enabling a multi-service business case, so that the social welfare benefits provided by the ESS is maximised.

* Regulations that enable network operators to consider battery storage systems in network planning, together with conventional investments in network infrastructure.

The Energy Storage Association has laid out a set of positions and policy recommendations that get into more policy weeds, explaining how FERC could meet those conditions.

In the meantime, a 2020 study found that, in a system with high renewable energy penetration, “storage value originates primarily from deferring investments in generation capacity (VRE, natural gas) and transmission.” SATA can do that — make the existing transmission system work better, thus cutting down the need for new lines.

Anyway: storage as transmission! It’s all part of the process of making transmission grids more networked, dispatchable, and intelligent.

Idea #2: Converting AC lines to HVDC lines

Finally, here at the very end, let’s quickly look at a proposal that I probably should have put very first, since it may be the quickest and easiest way to boost transmission grid performance.

Here’s the idea: existing AC (alternating current) lines have already fought all the siting battles. The land has already been claimed. In some cases, it is possible to convert AC lines to HVDC (high-voltage direct currect) lines.

It turns out the actual wire used is the same — it just needs to be reconfigured. “If you are using an existing corridor, you can use the existing lines and just change the bundles,” says Dr. Liza Reed, research manager for low carbon technology policy at the Niskanen Center. “So if you have three phases of four lines each, you've got 12 lines, and you can turn that into six lines on either side of the DC bipole.”

In some cases that will mean slightly extending the height of the tower.

But the costliest part is replacing AC substations with converters to shift the AC power to DC and vice versa (and in some cases, boosting the capacity of nearby substations to handle the additional power). Ideally, the new converters will be Voltage Source Converters (VSCs) using solid-state electronics. (This this post for more on VSCs, which Reed thinks are close to being the default choice for HVDC developers.)

Even with that cost, converting lines “is surprisingly cost-effective, even over relatively short distances, and, in some cases, may be the only way to achieve dramatic increases in the capacity of existing corridors.” That’s the conclusion of a 2019 study on which Reed — who did her PhD dissertation on converting lines at Carnegie Mellon — was the lead author.

In another study, Reed and colleagues looked at five options for expanding transmission capacity: reconductoring (replacing conductors) to increase current, increasing voltage, installing a FACTS (see previous post), converting to HVDC, and building a new line.

“In the normal course of operations, utilities have to replace lines as they age anyway,” Reed told me. “Replacing lines with high-temperature low-sag options can increase capacity quickly and at low cost compared to other solutions. The capacity increase is limited, but often still has substantial benefits to power flow.”

Converting lines has been a subject of discussion among power engineers and scholars for decades (see this 1997 paper), but as with previous technologies we’ve discussed, things are finally now beginning to come together: costs are falling even as grid congestion and the need for relief rise.

Reed says it’s difficult to pin down the total national potential of replacing lines, since projects are so dependent on specific line conditions, which in many cases have not been analyzed.

The most promising lines for conversion are double-circuit 345kV lines. The map below shows the roughly 25 percent of US transmission circuit-miles that are over 300kV. About two-thirds of those, something like 16 percent of total US transmission, is suitable, at least in theory, for conversion.

That’s not going to solve US grid woes, but it does represent a crucial opportunity to quickly expand the existing grid and relieve congestion while other solutions are being developed.

And that’s it, folks! Transmission! I can’t guarantee I won’t return to the subject in the future, but I think I pretty much covered the waterfront. I hope it was helpful.

Later this week, I’ll send a transmission wrap-up post, linking to all the previous posts in one place and summarizing what we’ve learned.

As a reward for sticking with me this far, here’s Mabel with a bloop of snow on her nose: